UK Edition
Feeds
Ofcom has launched a public consulation on Sky's plan to replace its free channels on digital terrestrial television - Sky Three, Sky News, and Sky Sports News - with a pay service named Picnic.
Sky unveiled Picnic on Monday. The service would offer Sky Sports 1, Sky One and Sky Movies SD1 as well as two channels - one factual, the other aimed at children - from third party providers. Were Ofcom to approve the use of the more efficent compression standard MPEG-4, Sky said it would then make Sky News available on a 24 hour basis. Picnic would be presented as a triple-play offering with options to take up broadband and telephony services.
In a statement, Ofcom said today: "As a result of the success of Freeview, the DTT platform has become the single largest platform for the delivery of digital TV in the UK. As digital switchover approaches, the DTT platform is reaching a significant transition point which may have implications for the development of pay TV services.
"It is essential that Ofcom considers how it can best ensure fair and effective competition for the benefit of consumers in the light of the development of the DTT platform, Sky’s strong market position in pay TV and the specific aspects of the proposal.
"The Sky / [National Grid Wireless] proposal would increase the choice and availability of retail pay TV services on the DTT platform. Consumers would be presented with an increase in choice of sports, movies, factual, children’s and general entertainment programming.
"However, it would also have an impact on competition for pay TV services on DTT and possibly across other digital TV platforms. For example, if as a result of Sky’s position in the wholesale provision of sports and movies channels, Sky were to emerge as the main retailer of pay TV services not only on the satellite platform but also on DTT, other providers of pay TV services may find it more difficult to enter the market. This may not be in the long term interest of consumers.
"Ofcom wants to ensure that consumers have the benefit of innovation and new services on digital TV while ensuring fair and effective competition in pay TV, both on DTT and more widely. Such an outcome would maximize benefits for consumers now and in the future."
Ofcom is seeking views until December 14 on three options: unconditionally approving the Picnic proposal; approving it with conditions designed to negate possible competition problems; and denying the application.
In response to Ofcom's announcement this morning, a Sky spokesman said: "Picnic will increase competition in TV, broadband and phone services and bring viewers a better choice of channels through their aerial. We believe these plans are a positive step for the DTT platform and we look forward to responding to Ofcom’s consultation in due course."
